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5c. Economics: Evaluating the Affordability of Medicines at the Household Level
Out of Pocket and Out of Reach: The Unaffordability and Unavailability of Medicines in Low- and Middle-Income Countries
1Health Action International, Netherlands; 2World Health Organization; 3Harvard Medical School / Pilgrim Health Care; 4Independent consultant
Problem statement: High prices matter to the vast majority of the global population who have to purchase medicines through out-of-pocket payments and to governments who have limited pharmaceutical budgets. Medicine availability matters, especially in public sector facilities which the poor rely on to access more affordable treatments. When medicines are unaffordable and unavailable, treatment simply becomes out of reach.
Objectives: To assess the price governments and patients pay for medicines, medicine availability, the affordability of standard treatments, and medicine price components
Design: A secondary analysis of the price and availability of 15 medicines, using data in 45 national and subnational surveys (36 countries) undertaken using the World Health Organization/Health Action International price measurement tool. Data were adjusted for inflation or deflation and purchasing power parity. International reference prices from open international procurements for generic products were used as comparators.
Setting and study population: Public and private sectors in 36 low- and middle-income countries
Outcome measure(s): Median prices (originator brands and lowest priced generic equivalents), median percentage availability, number of days’ wages needed by the lowest paid unskilled government worker to purchase standard treatments (affordability), and price components in the supply chain from manufacturer to patient
Policy changes: Policies such as promoting lower priced quality generics and alternative financing mechanisms are needed to improve medicine affordability and availability.
Results: Average public sector availability of generics ranged from 29.4 to 54.4% across WHO regions. Median government procurement prices for generics were 1.11 times corresponding international reference prices, although purchasing efficiency ranged from 0.09 to 5.37 times international reference prices. Low procurement prices did not always translate into low patient prices. Private sector patients paid 9–25 times international reference prices for lowest priced generics and over 20 times international reference prices for originator brands. Treatments for acute and chronic illness were largely unaffordable. Private sector mark-ups ranged from 2 to 380% for wholesalers and 10 to 552% for retailers.
Conclusions: Overall, prices were substantially higher than expected if purchasing and distribution were efficient and mark-ups were reasonable. Availability of medicines in the public sector was poor. Medicines, especially those to treat chronic diseases, were largely unaffordable.
Funding source(s): None
Quantifying the Impoverishing Effects of Purchasing Medicines: A Cross-Country Comparison of the Affordability of Medicines in the Developing World
1Institute for Medical Technology Assessment and Institute for Health Policy & Management, Erasmus University Rotterdam, The Netherlands; 2Essential Medicines and Pharmaceutical Policies, World Health Organization, Geneva, Switzerland; 3Health Action International Global, Amsterdam, The Netherlands
Problem statement: In developing countries, medicines make up a large portion of total health care costs. Because insurance often is not available or does not cover the costs of medicines, millions need to pay for their medication out of pocket at the time of illness. Hence, in increasing the access to medicines, the issue of affordability is crucial. In this study we quantify the affordability of medicines in developing countries.
Design: A cross-country comparison of the affordability of four essential medicines was carried out. We calculated the percentage of the population that would drop below the poverty line after a hypothetical procurement of a medicine. Thus, we compared pre- and post-payment incomes and set these against the international poverty lines of 1.25–2.00 U.S. dollars. Because availability of medicines in the public sector is low, we focused on the private sector, on which most people in developing countries rely for their medication. We looked at the originator brand (OB) and lowest priced generic (LPG) version of salbutamol 100 mcg/dose inhaler, glibenclamide 5 mg cap/tab, atenolol 50 mg cap/tab, and amoxicillin 250 mg cap/tab. Using prevalence rates for asthma, diabetes and hypertension, we also calculated the number of people already being affected or impoverished due to high medicine costs.
Study population; The populations of 16 low- and middle-income countries; in total approximately 775 million people
Outcome measure: We calculated the percentage of the population living below the poverty line before a (hypothetical) procurement of a medicine as well as the proportion of the population that would be below the poverty line after the procurement of a medicine. The proportion of the population being pushed below the poverty line, we call impoverish rates. This proportion of the population is at risk of being impoverished.
Results: In the 16 countries studied, large portions of the population are at risk of becoming impoverished due to the procurement of medicines. LPGs were much more affordable than OB products. For example in Yemen, a low-income country where 7% of the population lives on a pre-payment income of less than 1.25 U.S. dollars a day, OB glibenclamide purchased in the private sector would impoverish an additional 22% of the population versus 3% for the lowest priced generic equivalent. In Nigeria, a low-income country where 56% of the population lives below 1.25 U.S. dollars per day, OB amoxicillin bought in the private sector would impoverish an additional 23%, whereas when procuring the lowest priced generic equivalent this would be 12%.
Conclusions; The high cost of medicines can push large groups of patients into poverty. Our results call for action to make access to medicines a priority. Not only to ensure access to medicines but also as a component in reducing poverty. Possible lines of action include promoting the use of quality-assured, low-cost generics as well as developing, implementing, and enforcing sound national and international price policies such as, for example, restrictions on supply chain mark-ups, tax-exemptions, and regulating prices for end-users.
Funding source(s): No direct funding was received for this study. The authors were personally salaried by their institutions during the period of writing.
Effect of Removing Direct Payment for Health Care on Utilization and Health Outcomes in Ghanaian Children: A Randomized Controlled Trial
1Dangme West District Health Directorate, Ghana Health Service, Ghana; 2London School of Hygiene & Tropical Medicine, UK; 3Noguchi Memorial Institute for Medical Research, University of Ghana, Legon, Ghana; 4Research and Development Division, Ghana Health Service, Ghana
Problem statement: User fees are a known barrier to accessing health care. Governments are introducing free health care to improve health outcomes. Free health care affects treatment seeking, and it is therefore assumed to lead to improved health outcomes, but there is no direct trial evidence of the impact of removing out-of-pocket payments on health outcomes in developing countries. This trial was designed to test the impact of free health care on health outcomes directly.
Objectives: To compare the prevalence of anaemia (Hb<8g/dl) among children 6–59 months, from households with and without improved financial access to health care
Design: A two-arm randomized controlled unblinded trial with a third observational arm made up of households already self-enrolled in the scheme. The main comparison was between the two randomized arms. The self-enrolled arm was included in order to document the differences between households who paid their own premiums and those who had their premiums paid for them as a result of being recruited into the study, as a subsidiary part of the trial.
Setting: The Dangme West District in Southern Ghana, a rural district with an estimated population of 115,005
Study population: Children <5 years in households who were randomized to receive free enrollment into an existing pre-payment scheme or not, for a period of one year
Intervention: Provision of free primary and some level of secondary health care to households randomized to the intervention arm by enrolling them into an existing pre-payment scheme operating in the area. The control group continued to pay for health care out of pocket and received equivalent benefit in the year following the trial.
Policy: The direct cost of care is a barrier to the poorest in accessing care, but it is not the only one, and other modifiable barriers have to be addressed if removing the direct cost of care is to have a useful impact on the health of the poorest.
Outcome measure(s): The primary outcome was moderate anaemia (Hb, 8 g/dl); major secondary outcomes were health care utilization, severe anaemia, and mortality.
Results: 2,194 households containing 2,592 Ghanaian children under 5 years old were randomized into the two trial arms; 165 children from families who self-enrolled formed an observational arm. At baseline, the randomized groups were similar but different from the self-enrolled. Introducing free primary health care resulted in children in the intervention arm utilizing primary care significantly more (2.8 visits/person-year) than those in the control arm (2.5 visits/person-year) [95% CI 1.04–1.20; P=0.001]. There was no measurable difference in any health outcome. The primary outcome of moderate anaemia was detected in 37 (3.1%) children in the control and 36 children (3.2%) in the intervention arm (adjusted odds ratio 1.05, 95% CI 0.66–1.67). There were four deaths in the control; five in the intervention group. Mean Hb concentration, severe anaemia, parasite prevalence, and anthropometric measurements were similar in each group.
Conclusions: In the study setting, removing out-of-pocket payments for health care had an impact on health care-seeking behaviour but not on the health outcomes measured.
Funding source(s): Gates Malaria Partnership, LSHTM, with funds from the Bill & Melinda Gates Foundation
Consumer Knowledge and Perceptions about Medicines: Evidence from Household Surveys in Five Low- and Middle-Income Countries
1University of Nottingham, United Kingdom; 2Harvard Medical School and Harvard Pilgrim Health Care Institute, USA; 3World Health Organization, Switzerland
Objective: To generate reliable evidence on community knowledge and perceptions about medicines that can serve as baseline for interventions aimed at educating the public about medicines and at increasing transparency in the pharmaceutical sector. Specific aims are to describe the opinions prevailing in the community about quality, affordability and access to medicines and to identify how socioeconomic and geographic disparities shape community beliefs and awareness about issues related to pharmaceutical products.
Design: Descriptive, cross-sectional analysis of survey data
Setting: Household surveys conducted in Ghana, Jordan, Kenya, Philippines, and Uganda between 2007 and 2009 using a survey instrument developed by the World Health Organization (WHO) to monitor country pharmaceutical situations at the community level.
Study population: Households were selected by multistage cluster sampling (900 to 1,080 households per country).
Outcome measure(s): Selected indicators of attitudes, experiences, and beliefs about obtaining and using medicines
Results: 3,133 (59.7% of total sample) of households kept at least one medicine at home: most frequent classes of medicines found in households were analgesics, antibiotics, and antacids. 43.2% of households reporting a recent acute illness and 30.8% reporting a chronic disease had obtained medicines free of charge in a public health care facility.
61.6% of respondents agreed that they can easily find out how much medicines cost; 57.3% knew that two identical medicines may be sold at different prices; 47.3% knew where to find medicines at the lowest price; and 38.7% were comfortable asking for the least expensive product when buying a medicine. 36.4% of respondents agreed that health providers in private health care facilities take into account their ability to pay when prescribing medicines, 67.2% trusted their pharmacists to recommend good-quality medicines, and 58.8% trusted them to recommend medicines that offer best value for money. 68.02% of respondents believed that medicines of better quality are more expensive. 59.6% of respondents knew that the same medicine may have different names, and 44.5% had heard the term generic to describe medicines; of these, 60.7% thought generic medicines are usually lower in quality than brand medicines, and 77.7% thought generics were lower in price than brand medicines. Multivariate analyses are under way to characterize socioeconomic and geographic disparities and the key determinants of perceptions about medicines.
Conclusions: Our results provide evidence about community knowledge and perceptions about medicines in low- and middle-income countries.
Funding source(s): The WHO Department of Essential Medicines in Geneva organized and funded data collection, with support from the Medicines Transparency Alliance.